The iPad 2 and the End of Publishing as We Know It

By Tien Tzuo • March 2, 2011

by Tien Tzuo

I love apple products. Those of you that know me know I’m a big iPad and Mac fan. At the risk of being flamed by parents, my daughter has been an iPad addict since she was 9 months old, something which still amazes me.

The headline of the iPad 2 may appear to be about two built-in cameras, high resolution screen or a thinner tablet. But we at Zuora think the real news is this: are we seeing the end of the publishing business as we know it?

It’s no coincidence that the new tablet was announced two weeks after Apple announced its much heralded, feared and criticized Subscription Service. Apple’s strategy all along has been to corner news content the same way it cornered music and apps. And like the publishers of those two latter categories, media publishers are now waking up to the fact that the iPad is not the great white hope it thought it would be.

As I wrote on TechCrunch in the wake of the Subscription Service announcement, Apple doesn’t know the media publishing industry, yet it is now forcing publishers to play by its house rules, which take 30% of subscription revenue and cut the lifeline to subscribers. And in this case too, the house always wins.

We at Zuora can’t imagine a world without a thriving free press. We believe that professional journalism is vital to a democratic and global society. As the last two months have shown us, we need a strong, viable press corps more than ever. While local newspapers and magazines are struggling, it’s important to understand that it’s not journalism that’s broken, it’s the media business model.

We also believe there’s a much better way for subscribers to keep getting their news on the iPad 2 that doesn’t put journalists in the poorhouse. It’s absolutely true that online ad models have dried up and it’s clear that “free” is not a strategy.

In order to survive, publishers need to commit to a new manifesto:

Media companies need to take charge of their own destiny, not hand the keys to Apple.

Media companies need to build out their own subscription model – one that is flexible, can keep up with changing customer tastes and desires, and can shift pricing whenever necessary.

Media companies need a flexible platform to create the right bundles for the right subscribers.

Media companies need to recognize that, as other subscription businesses have learned, a one-size-fits-all approach won’t maximize revenue, and over time they’ll need to package content to attract different market segments.

Media companies need to learn to adjust, because if we’ve learned anything in the relative infancy of monetizing online content, whatever model publishers start out with are likely to be completely different a year – or even six months – from now.

No matter how you fall on this issue, I know that we all have an opinion about it. Come contribute your own ideas and feedback at www.saveourpress.com. This is an important discussion that clearly deserves more attention than whether or not you can play Angry Birds in HD.